KEY POINTS:
British Airways will cancel more than 1000 loss-making flights in the next three weeks, leaving tens of thousands of travellers stranded.
Each route is believed to be losing at least £1 million ($2.8 million) a year, and the airline has concluded it will cost less to compensate passengers who have already booked, and pay crew to stay at home, than it will to run the aircraft.
Thirty thousand passengers who have already booked will be affected by the cuts, which have started.
The abrupt cuts to flights from Birmingham, Manchester and Scottish airports are necessary "to protect the ongoing viability of the business", a terse BA statement said.
The business in question is BA Connect, whose slogan is "Low fares - same great service". It was launched a year ago as a no-frills subsidiary in a bid to stem losses from BA's regional services.
The attempt failed: BA Connect is believed to be losing £100,000 a day. In its half-year results, BA took a one-off financial hit of £106 million for BA Connect, and said it would offload the operation to Flybe, Britain's biggest regional airline.
BA has struggled to profit from short-haul operations. The growth of low-cost carriers in the past decade has hit it harder than any other large European airline. In effect, BA is paying Flybe more than £100 million to take the losing operation off its hands.
Flybe said: "BA will ensure that the new business has sufficient funding to achieve its growth targets and the transition out of the current BA Connect fleet."
BA's chief executive, Willie Walsh, has said that the subsidiary's routes were "not a strategic part of our business", adding: "Such activities are better undertaken by a regional, low-cost airline."
Pilots, cabin crew and engineers are to be offered posts with Flybe, but ground staff and management will be affected - resulting in a few hundred job losses from BA Connect's 2800 staff.
The move comes three weeks before the summer schedules begin on March 25. None of the axed routes is expected to be resurrected for the northern summer. Flybe said it would retain only 35 routes, and none of the aircraft, from BA Connect.
The summer timetables will show sharp reductions in overall services from regional airports, particularly where BA Connect and Flybe's routes overlap.
But BA's sudden decision to cancel more than 1000 flights in advance of the handover was unexpected. They include business routes such as Birmingham to Frankfurt, Bristol to Zurich and Manchester to Berlin.
"All of the routes being cancelled are substantial loss-makers for the current BA Connect business," BA said.
While all airlines lose money on certain departures, known as "dog flights", it is unprecedented for a profitable national carrier to axe so many services.
Passengers have been offered a range of options, from a full refund to making the same journey using connecting flights via London on BA.
- INDEPENDENT
